Google recently began beta testing a new product specific ad format with a select group of their advertising customers.
The new product ads are not intended as a replacement for the traditional AdWords text ads, and the two ad types will appear together in some sort of expanded “sponsored links” area.
According to an email sent by Google to participating advertisers, the new product ads will feature “product specific information directly in the ad such as price and product image.”
Only advertisers who use Google Base will be able to utilize this new ad format, as the content of the ads will be pulled directly from advertisers’ Google Base feeds.
Similarly, advertisers using the new product ads will not bid on keywords, rather the “keywords” will be taken from the text and descriptions contained in advertisers’ Google Base feeds. Product ads will be triggered to appear when a user’s search query closely matches information contained in an advertiser’s Google Base product feed.
Google will also be significantly changing its advertising pricing model with the new product ads.
Unlike with Google’s current text ads, advertisers will not pay every time someone clicks on one of their ads, but rather only when a “qualified conversion” takes place.
Similar to setting a maximum CPC for each keyword, advertisers using product ads must set a commission amount they are willing to pay Google for each conversion. Like keyword bids, Google will use the commission amount to determine ad rank and placement.
According to the Google email which details the product ad format, “Ad Rank = Commission × Quality Score. The quality score takes into account the relevance of your product to the user’s query, conversion rate of the query and the matched product ad on Google, your account history, and other relevant factors.“
This new product ad program is likely an attempt by Google to counter the challenge posed by Microsoft’s new search engine, Bing.
Many online shoppers entering product-specific search queries have found that Microsoft’s new search engine, Bing, offers more relevant, practical ads than does Google. With the new product ads, which will include more detailed, product specific information, Google hopes to provide online shoppers with more useful, product-targeted ads.
It also goes without saying that Google hopes the ads will open up a whole new advertising revenue stream.
It looks like the search engine battle is heating up just in time for summer.
